THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: Thanks very much. And to our viewers, you're in THE SITUATION ROOM.

Happening now, the first presidential contest up for grabs. With exactly one month to go we're on the ground in Iowa where front- runners are slipping, an underdog is surging and the suspense is building.

Also this hour, is Fred Thompson the new Ronald Reagan? I'll ask the actor turned presidential candidate if comparisons to the Gipper have actually hurt him.

And the new bombshell about Iran. A declassified report now says Tehran's nuclear threat isn't as urgent as some people thought. Did the Bush White House get it wrong? I'm Wolf Blitzer, you're in THE SITUATION ROOM.

From here on out, every smack down, every slip up will matter. It's exactly one month before the first major presidential contest and many of the candidates are now bringing their A game, meaning attack.

That's what Hillary Clinton is doing facing a serious political threat from Barack Obama ahead of the Iowa caucuses. Senator Clinton is blasting everything from his ideas to his abilities. Let's turn it our senior political correspondent Candy Crowley, she's in Des Moines watching this, the race clearly up for grabs, Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Absolutely, Wolf. We have three polls out today on the Democratic race. Two showed Hillary Clinton ahead but one showed Barack Obama ahead and what we have here is a real race.

(BEGIN VIDEOTAPE)

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: You can feel the caucus coming because it's getting cold. You know where we are.

CROWLEY (voice-over): One month out from the caucuses, Iowa is seeing the beginning of winter and the suggestion of a changing political dynamic.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: It's amazing how you go from being DOA to being a genius in about three weeks. But right now we're doing pretty good in Iowa. CROWLEY: He was never dead on arrival in Iowa and while front- runner overstates the case for what is essentially to three-way tie, Obama, Clinton, Edwards. Obama is atop the state polls now. It gives him mojo in this final month and threatens her aura of invincibility.

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: So, you decide which makes more sense to entrust our country to someone who is ready on day one to make the decisions and the changes we need or to put America in the hands of someone with little national or international experience who started running for president as soon as he arrived in the United States Senate.

How did running for president become a qualification to be president? Well, this is not a job you can learn about from a book.

CROWLEY: He is the front-runner and the target.

OBAMA: I think what people need to focus on is that all these accusations that are starting to come out seem to correspond to shifts in political fortune.

EDWARDS: Voters are going to be focused on who is ready to be president, who is ready to bring the change this country needs, to fight for that change.

CROWLEY: Still working the living rooms and dining rooms of Iowa and New Hampshire is the second tier, Richardson, Biden, Dodd, hoping for a miracle or more realistically a surprise showing big enough to propel them into New Hampshire.

CLINTON: It's close. It's tight, it's going to be a race to the finish line.

CROWLEY: After 11 months of campaigning, the beginning is near.

(END VIDEOTAPE)

CROWLEY (on camera): Getting ready for this last, what would be and may be a really volatile month, Barack Obama has set up an e-mail address for his supporters to write if any negative information comes in via leaflet or mailbox about him, they've also set up a Web site to respond quickly, the Clinton campaign already has one. Wolf?

BLITZER: And I take it the Democrats, the rivals to Hillary Clinton, especially Barack Obama and John Edwards, they feel that they've got to stop her in Iowa, if they're going to have a chance in New Hampshire, South Carolina down the road.

CROWLEY: Absolutely. This is the first place and the best place, not to stop her from getting the nomination, really, but to slow her down. They're going to have to stop her from getting the nomination in the states between now and South Carolina. But, certainly, this is the first and the best place to begin to slow her down.

BLITZER: Candy, thanks very much. Candy is in Iowa for us. Let's go to the Republican side and see what's happening there. Mike Huckabee's popularity in Iowa has been surging dramatically. Now, he actually tops the fresh poll from the "Des Moines Register." Shows Huckabee with 29 percent compared to Mitt Romney's 24 percent and only 13 percent for Rudy Giuliani, but that fortune could come with a trap door. Huckabee is now becoming a really prime target for many of his Republican rivals. CNN's Dana Bash is joining us from Des Moines and she is watching all of this unfold and an intense battle on the Republican side and that requires organization.

DANA BASH, CNN CORRESPONDENT (voice-over): Absolutely, Wolf. You just showed that poll and it does show that there is a new leader here in the Republican race and that is Mike Huckabee, but Mitt Romney is right behind him and it shows just like on the Democratic side, the Republican race in Iowa is completely up for grabs.

(BEGIN VIDEOTAPE)

BASH (voice-over): Right now this is the man on the rise. Mike Huckabee here for his 46th day of campaign events shoring up his new lead in the polls.

BASH: That's mostly evangelicals drawn to his staunch opposition to abortion and gay marriage, but, here, he talks national security and his opposition to controversial torture tactics, including waterboarding.

HUCKABEE: If we mistreat others, they will mistreat our soldiers.

BASH: Meanwhile, Mitt Romney spent all weekend lobbying the kind of social conservatives flocking to Huckabee and taking tough questions.

UNIDENTIFIED MALE: Describe your conversion, your journey from the pro-life, excuse me the pro-choice position to the pro-life position specifically on abortion.

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: Thank you, happy to.

BASH: At nearly every stop here now Romney takes a whack at Huckabee for his record on immigration and taxes.

ROMNEY: His spending went from $6.7 billion to $16 billion. So we have a very different perspective on spending and taxes and immigration.

BASH: One month out and a campaign's organization actually getting voters to the caucuses matters more and more.

UNIDENTIFIED FEMALE: Actually showing your support on caucus night is what we need out of our supporters here in Iowa.

UNIDENTIFIED FEMALE: I'll get a list of the Republican Party in our area and just see if I can't get some more Fred supporters to come to caucus night because I realize now that it's a number's game.

BASH: Especially if you're far behind like Fred Thompson. But Iowa voters make up the their minds late and caucus veterans insist the GOP race is still wide open.

UNIDENTIFIED MALE: Some candidates are going to plummet and some are going to shoot through the roof and they might rise and fall between now and then.

(END VIDEOTAPE)

BASH (on camera): And a new "Des Moines Register" poll really backs that up, Wolf. It says that six in 10 Republican voters, six in 10 say that they are very, could very easily change their mind between now and caucus day on who they're going to support and who they actually vote for.

BLITZER: And amidst all of this, Dana, there are now some new allegations of dirty tricks that are going on. I suspect a lot more of this over the next month or so, but what is the latest?

BASH: That's right. Well, supporters for Fred Thompson and Mitt Romney and even Rudy Giuliani, they report that they got some phone calls last night, so-called push polls, automated calls, essentially asking which candidates they support and then giving some negative information about those candidates. It also went on to direct the callers to go to a Web site. We'll put it up on the wall, it's trusthuckabee.com and on this Web site you can also click and sign up to be sort of a grassroots supporter or so-called precinct captain on caucus day for Mike Huckabee.

Well, CNN asked Mike Huckabee about that today and he says he wants those calls to stop immediately and he also said that is not the kind of politics that we want it be a part of. Wolf?

BLITZER: All right, Dana, thanks very much. Dana Bash on the campaign trail for us.

Let's go to Jack Cafferty. He is in New York with the "Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Where does all the stuff come from, Wolf? They all say this is the kind of politics I don't want anything to do with. And I decry this and we just don't want it and it's not a part of our campaign.

And it's all over every ... BLITZER: Happens every single time. I've been covering politics for, what, 30 years plus and it always comes up, especially as you get closer and closer to the election.

CAFFERTY: Sure. Well, somebody's not telling the truth maybe. All right, here we go, fat little children in the United States, school kids, may soon be in a battle with Uncle Sam. Congress is thinking about banning all junk food from snack bars, vending machines and a la carte cafeteria lines in schools. The "New York Times" includes this would include candy, sugary soda, salty, fatty food. Stuff like potato chips.

It'd be the broadest effort ever to limit what kids eat, at least while they're in school. Supporters think it will pass. The think it is a good idea and think there is a lot of public interest in improving school food and leaders in the food and beverage industry help to come up with these new standards.

The proposed rules would mean elementary and middle school students could only buy plain bottled water, eight ounces of fruit juice or plain or flavored low-fat milk. Yuck. Diet soda, sports drinks could be sold in the high schools, along with some other drinks with limited calories. As for food, there would be limits on saturated and trans fat, salt, calories, food sold would also have to have less than 35 percent sugar. Pretty much kills all the fun stuff.

Some critics are frustrated that the states wouldn't be allowed to enact even tougher limits. However, individual school districts would still be able to pass stronger restrictions if they so desired.

The question is this, is it the government's job to limit junk food sales in our schools? E-mail your thoughts to caffertyfile@cnn.com or go to cnn.com/caffertyfile. Wolf?

BLITZER: All that boring stuff, sounds like my diet. Sounds like what I eat every single day.

CAFFERTY: But you're a healthy guy. You do the treadmill every morning.

BLITZER: It's totally boring, though, Jack.

CAFFERTY: That's why you can work 1,000 hours a week on TV because you're in good shape.

FRED THOMPSON, (R) PRESIDENTIAL CANDIDATE: I think sometimes people expect you to come out of that environment and to be well- scripted and to be slick and be smooth, none of which I have ever been.

(END VIDEO CLIP)

BLITZER: Fred Thompson distancing himself from the Hollywood scene. But does he embrace comparisons to Ronald Reagan? Stand by for part three of my interview with the actor turned presidential candidate. You'll see it coming up next.

Also, Republican Mitt Romney set to deliver the speech he wasn't sure he wanted to give. Does his decision to explain his Mormon faith mean he's running scared?

And new insights into the hostage taker over at the Hillary Clinton campaign office in New Hampshire. What drove him to do it? We're learning more information. We'll share it with you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Most of the Republican presidential candidates are certainly eager to liken themselves it Ronald Reagan, but only one of them can claim a special kinship with the actor turned commander in chief and that would be Fred Thompson. I spoke with him right here in THE SITUATION ROOM.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk about Ronald Reagan a little bit because when you were thinking about running for president, a lot of your supporters, a lot of your fans said, you know what? Fred Thompson is the new Ronald Reagan. A movie star, he's got star qualities, pizzazz, he was a senator and he is going to pick up that Ronald Reagan mantle.

THOMPSON: I can't help those comparisons. In this business they put labels on you and some of them are good labels and some of them are bad labels. And you're never able to shake them.

BLITZER: Does that hurt you?

THOMPSON: Well. Of course any comparison with Reagan is a complimentary one but he was successful for different reasons that a lot of those same people think. It wasn't because he came onto the stage and blew everybody away immediately. It was because of the principles he stood for and the fact he was willing to stand for them and he obviously believed in what he was saying.

When he talked to the American people he had credibility which very few people in Washington have nowadays.

BLITZER: Because a lot of people saw Fred Thompson, the movie star, the powerful roles ...

THOMPSON: Oh sure. Yeah. BLITZER: ... that you played on "Law & Order" and other - the small screen, the big screen and they said, wow, this guy, he looks like a president.

THOMPSON: Yeah. Yeah. Well. You are expected sometimes ...

BLITZER: The expectations are very high.

THOMPSON: Yeah. I think sometimes people expect you to come out of that environment and be well scripted and to be slick and to be smooth. None of which I've ever been and essentially have played myself. I've never had an acting lesson. I'm not really a professional actor in the sense that most people in that business are.

So they have that level of expectation. But my strength back in Tennessee when I started, never been in politics, never made a political speech as such. Never done a television ad and I was 20 points down against a popular incumbent congressman. I just went out and met with the people and gradually got traction and by election night it was 20 points ahead and I was reelected by about the same margin.

And then when I voluntarily left the Senate I was probably according to the polls more popular than when I went in.

So I have one relation with the pundits and the professionals and have another relationship with the people. It's always worked out for me.

BLITZER: All right. Let's talk about some of these polls that are coming in. The new "Des Moines Register" poll in Iowa. It has Huckabee now at 29, Romney 24, Giuliani 13. You've gone down to nine from 18 percent a month earlier. What happened?

THOMPSON: Everybody has gone down. If you look at the national polls ...

BLITZER: Not Huckabee.

THOMPSON: Well, no, not Huckabee. But if you look at the national polls, nobody has gone down more than Rudy Giuliani but he's still number one in the national polls. And I am still number two.

So those numbers fluctuate.

BLITZER: (inaudible) the national polls because you're talking about Iowa, New Hampshire, Michigan ...

THOMPSON: Well, not important at all because nobody wants to talk about it. And apparently South Carolina's not important either.

BLITZER: Well talk - let's talk about the New Hampshire poll.

THOMPSON: I rest my case. I'm up in some and down in some. News flash.

BLITZER: But in New Hampshire you're not doing well.

South Carolina, which is critical for you and I agree because it's right near Tennessee, it's the South, you've got a base there. In this ARG poll that came out the other day, Giuliani is right now 23, Romney 21, Huckabee 18. You're down at 13 percent. If you come in fourth in South Carolina, that would not be good.

THOMPSON: That's the most outlying thing I've ever heard. I don't even know who these people are.

BLITZER: The American Research Group.

THOMPSON: All I know is now for about four months, I've either been first or tied for first there and you have these things that come in over the transom about every 48 hours now. I can't answer for all of them. All I can tell you is in South Carolina as well as other parts of the country, from Texas on out to California where I was this weekend and other places, I'm doing very well.

(END VIDEOTAPE)

BLITZER: Fred Thompson, speaking with me here in THE SITUATION ROOM.

Coming up, we're on the trail in another key primary state, New Hampshire. One of the presidential candidates getting a significant endorsement in the Granite State. We're going to tell you who it is and what it could mean for the candidate's campaign.

Plus, British lawmakers win the freedom of a teacher jailed in Sudan over a teddy bear's name. We're going to tell you where the teacher is headed right now. Lots more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming to THE SITUATION ROOM right now. What's going on, Carol?

CAROL COSTELLO, CNN ANCHOR: Well, Wolf, we're learning more about the man accused of taking five people hostage in Rochester, New Hampshire, on Friday. Prosecutors say suspect Leeland Eisenberg has a criminal record that includes two rape convictions and an escape from prison. According to court documents, Eisenberg's stepson says Eisenberg was drinking heavily last Friday and Eisenberg's wife reportedly said he had been binge drinking for three weeks and desperately wanted help.

The teenager at the center of the Jena Six controversy could be released by a juvenile facility by June. Mychal Bell's lawyer says his client has agreed to a plea deal in the alleged assault on a white classmate. Under the deal Bell has agreed to plea guilty to second degree battery. A court threw out bell's earlier conviction saying the 17-year-old should not have been tried as an adult. And a British schoolteacher has left the scene of a nightmare and hopes to put it all behind her. Gillian Gibbons has been freed from a jail in Sudan and is headed back to her home country. That is according to the British foreign office. She had been sentenced to 15 days in jail after she allowed her students to name a teddy bear "Mohammed." Sudan's president pardoned her.

That's a look at the headlines right now, Wolf.

BLITZER: Glad she's on the way back home, thanks very much, Carol, for that.

Republican Mitt Romney, he's now set to talk to the American people about his Mormon faith.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is probably a better safe than sorry strategy.

(END VIDEO CLIP)

BLITZER: After so many months of mulling why has Romney decided to explain his religion now? We're going to set the stage for his pivotal speech.

Plus, a newly declassified report reveals Tehran actually backed away from building a nuclear bomb. Did President Bush overplay the prospects for World War III? Jack Cafferty, Gloria Borger and Carl Bernstein, they are standing by live.

They'll also tell us if Karl Rove is giving Barack Obama some winning advice. Would President Bush's long-time political guru actually want to help a Democrat? Stand by, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, eerie echoes of American intelligence gone wrong. A new report says Iran stopped its nuclear weapon's program years ago. How does that square with what the Bush administration has been saying?

Also, we are exactly one month away right now from the first major presidential contest and things are clearly changing. Will the front-runners continue to slip in the polls? We're watching this and will the underdogs who are surging continue to climb?

And Karl Rove tells Barack Obama don't be quote, "weak." One of the fiercest Republican strategists out there now urging a Democrat to launch a grand attack on Hillary Clinton. All that coming up with the best political team on television. I'm Wolf Blitzer, you're in THE SITUATION ROOM. A bombshell today defusing months of warnings that Iran might be on the brink of having a nuclear weapon. There's a newly declassified U.S. intelligence report saying Iran actually stopped its nuclear weapons program back in 2003. It probably won't be able to make a weapon until some time well after 2010. Let's go to our White House correspondent Ed Henry. Ed?

ED HENRY, CNN CORRESPONDENT: Wolf, this new report is a mixed bag, at best. For the White House's potential efforts to build a case for either new sanctions or even war with Iran.

(BEGIN VIDEOTAPE)

HENRY (voice-over): A new Bush administration report finds Iran actually halted its nuclear weapons program four years ago, raising questions about why President Bush has been so aggressive about declaring Tehran an imminent threat.

GEORGE W. BUSH, U.S. PRESIDENT: If you're interested in avoiding World War III then prevent them from having the knowledge necessary to make a nuclear weapon. And I take the threat of Iran with a nuclear weapon very seriously.

HENRY: National security adviser Stephen Hadley denied the president was hyping the threat, but told reporters that aides recently went to Mr. Bush to warn him to stand down because of the new intelligence assessment. Later, however, Hadley back tracked.

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: He was not told to change what he says about it, what he was told was, we have new information, it is interesting, it is going to take us some time to understand it.

HENRY: Despite the fluidity of the intelligence, the president and Vice President Cheney have continued to make bold charges that Iran has been pushing for nuclear weapons.

RICHARD CHENEY, U.S. VICE PRESIDENT: Our country and the entire international community cannot stand by as a terror supporting state fulfills its most aggressive ambitions.

HENRY: The new National Intelligence Estimate does declare Iran is still enriching uranium and could restart a nuclear weapons program, which is why the White House is still talking tough.

HADLEY: If we want to avoid a situation where we either have to accept Iran on a road to a nuclear weapon with a path to a nuclear weapon or the possibility of having to use force to stop it with all the connotations of World War III, then we need to step up the diplomacy, step up the pressure.

(END VIDEOTAPE)

HENRY: Senate Democratic leader Harry Reid said the intelligence was wrong again, just as it was in the run-up to war in Iraq, Reid saying it's time for the White House to step up the diplomacy even more and the rhetoric less -- Wolf.

Our own Jack Cafferty. He's in New York. His book, of course, is entitled "It's Getting Ugly Out There". It's been a "New York Times" best-seller.

And we also want to go to New York for the Pulitzer Prize winning journalist.

Carl Bernstein. He's joining us now regularly as a CNN contributor.

Carl, welcome to CNN.

We're going to be using you a lot here in THE SITUATION ROOM.

But I want to start off this discussion with Jack Cafferty. Back in 2003, we now learn from the National Intelligence Estimate, Iran froze its nuclear weapons program, but it wasn't clear, apparently, until now -- Jack, what do you make of this?

CAFFERTY: How would you like to have Stephen Hadley's job?

He's got to go out there and try and peddle this stuff and make it all fit -- and it doesn't.

In 2005, there was another National Intelligence Estimate suggesting Iran was hell bent on developing a nuclear bomb and would have one within five years. That would be 2010. Now we're told they haven't been working on it all since 2003. We've got the president of the United States making these noises about World War III. It makes you wonder if the left hand knows what the right hand is doing.

But the one comfort that I think we can take in this is that this latest estimate of their capability, saying they gave up the program in 2003, at least provides a much stronger case for continued negotiation and diplomacy and perhaps not a head long rush into some kind of air strikes.

BLITZER: What's your take, Carl?

CARL BERNSTEIN, CNN CONTRIBUTOR: It's good news for the world and that it will stop Bush's bellicosity, one hopes. And that he'll deal with the facts instead of the other stuff he's been dealing with.

BLITZER: There's going to be political fallout, Gloria, from this, especially that feud that's been going on between Barack Obama and Hillary Clinton on talking to the Iranians, if one of them were to become president of the United States. GLORIA BORGER, SENIOR POLITICAL ANALYST: I think, in a sense, Wolf, this really gives all the Democrats a lot of fodder for their arguments with the Republicans. As soon as this was announced today, I can tell you, my little Blackberry was filled up with e-mail messages from all the Democratic campaigns -- not the Republican ones, but the Democratic campaigns.

And now let me tell you what Hillary Clinton said. She said: "This exposes the effort by the Bush administration to distort intelligence" -- talking about President Bush's statement that Iran's nuclear weapons could lead to World War III. And I think this also reflects an effort by the Central Intelligence Agency not to get it wrong again. They're very mindful of what happened with that 2002 National Intelligence Estimate and I think they're trying to be really, really careful this time -- Wolf.

BLITZER: I want to put up on the screen the latest "Des Moines Register" Iowa poll on the Democratic side because it shows that Obama is actually ahead of likely Democratic caucus goers, 28 percent; Hillary Clinton, 25; Edwards, 23. It's a statistical three-way heat.

And, Carl, let me bring you in. You wrote the biography on Hillary Clinton. Karl Rove is now giving some advice to Barack Obama in that memo published in the "Financial Times" -- you know what? You've got to get tough with this lady, otherwise you're not going to win.

BERNSTEIN: I don't think Obama needs the advice of Karl Rove. Right now, the real news in Iowa is that Hillary Clinton and her campaign are in terrible trouble. They know it. They're looking for a magic bullet. They're trying to get the endorsement of the "Des Moines Register" or some of its columnists. They need something that's going to throw some change their way into this campaign because they know they're sinking in the polls and they have a real weakness in terms of her being perceived by voters as being less than truthful and trustworthy.

BLITZER: Jack?

CAFFERTY: I just wonder, Carl, what led to the problem in the Clinton campaign?

We were getting ready for the coronation here.

BERNSTEIN: Well, I'd say part of it has to do with the media. The media was ready for the coronation. But, also, the candidates got rough on Hillary Clinton at that debate several weeks ago in Philadelphia. And Tim Russert came up with this question about the records in Arkansas. And from there on in, it was about dissembling. And that's the opening I think these candidates have been looking for. And it registered with a lot of voters.

BORGER: Can I say...

BERNSTEIN: Also...

BORGER: Can I say this...

BERNSTEIN: Go ahead, Gloria.

BORGER: I think this is really about the voters now starting to pay attention to this race and taking a look at Hillary Clinton and deciding that the two arguments -- the argument of inevitability and the argument of electability -- may not really be working for her. They're taking another look at Obama, who has started to get tougher, as Carl was saying, on Hillary Clinton. Today, Hillary Clinton has started fighting back. And that could be a bit of a problem for her because, ironically, as the woman in this race, she is regarded by most voters as the toughest, but she is not the most likable. They like Obama and some of the others, more than they like Hillary Clinton.

So she's -- she's got a fine line to walk here because she's got to fight back...

BLITZER: All right.

CAFFERTY: Wolf, let me ask...

BORGER: ...but she can't be mean.

BLITZER: Hold your thought, Jack...

CAFFERTY: Let me ask you a question about Carl...

BLITZER: Jack, hold your thought for a second, because I want to take a quick break. But we've got a lot more to talk about -- this and more, including a major endorsement in another critical state.

Will it breathe some new life into the Republican presidential candidate, John McCain's, campaign?

That's going to come up in our roundtable, as well.

Plus, Mitt Romney poised to tackle concerns over his Mormon faith head on. We're going to tell you what he has now planned to do.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're continuing our roundtable with Gloria, Jack and Carl.

BLITZER: Jack, you wanted to make a point just before we went to the commercial break.

CAFFERTY: Just a quick thought on the Karl Rove memo concerning how Barack Obama can beat Hillary Clinton. I can't imagine the Republican leadership was too thrilled to see that memo. The Republican attack machine is geared up and ready to go on Hillary. They know how to do that. They want Hillary to be the candidate. They think they can beat Hillary.

But Frank Rich wrote a column over the weekend suggesting the Republicans could be faced with a very awkward situation if Barack Obama is the nominee for the Democratic Party. The Republicans are the party of Macaca and Katrina and race relations aren't their long suit. And it could prove awkward for them to get aggressive in a campaign against a black candidate. That's all. (INAUDIBLE).

BLITZER: Yes, all right.

Let's talk a little bit about the GOP race right now. And, Gloria, I know you're in New Hampshire. But first I want to put up this latest "Des Moines Register" poll in Iowa. Huckabee is actually ahead in this poll, 29 percent; Romney, 24; Giuliani, 13; Thompson, 9; McCain, at 7 percent, tied with Ron Paul.

You're in New Hampshire right now. I guess McCain is really basing a lot of his hopes on what happens in New Hampshire. And he did get an important endorsement.

BORGER: Yes, he did. He got the endorsement of the "Union Leader," a very conservative news organization, which eight years ago endorsed Steve Forbes. They didn't much like McCain much eight years ago. They said he would make a good number two on the Democratic side.

So they sort of changed their mind on John McCain. I think he believes that helps him with conservatives in this state. He clearly knows he's not in contention in Iowa. He's basing everything on New Hampshire. He's a little worried about Huckabee. He likes Huckabee. I spent some time with McCain on his old Straight Talk Express today. He really likes Huckabee, but he understands that he's moving up. But he sees him as the greatest threat, of course, to Mitt Romney.

BERNSTEIN: There's a con...

BLITZER: Carl, what's happening on the Republican side?

BERNSTEIN: Well, all these things we're talking about are related because they all, including the Iran story and Bush's relationship and what he has been saying about Iran, all have an element about people looking for a desire of transparency, truth telling. McCain is known as the straight talking guy. Hillary is not known for that. Obama has been selling himself as I'm going to tell you the truth, I'm going to be straight with you. Huckabee the same thing.

And I think, if you read the polls, which are only a snapshot, but you go deep into the questions, you see a desire by the electorate, both in New Hampshire and in Iowa, for some straight talk. And it's a big problem for some candidates. And there's also the question with Hillary Clinton about the idea sinking in in Iowa, particularly, that this is a restoration that she is campaigning for. And I think there is some discomfort with the idea of 24 years of Bushes and Clintons in a row or, perhaps, 28 years. And it shows in some of the questioning in the polls. It's a little soft, but I think we'd better start looking at that as a factor in what the voters may be telling the pollsters. BLITZER: You know, Jack, this Mike Huckabee phenomenon -- and it is exactly that. The guy has got no money, but he's actually beating Mitt Romney in this "Des Moines Register" poll in Iowa -- who's got tons of money.

What do you -- what's going on here?

BERNSTEIN: And Romney is all over the (INAUDIBLE)...

BLITZER: Hold on, Carl.

BERNSTEIN: ...with what he said...

BLITZER: Hold on, Carl.

I just want Jack to weigh in on that -- that specific point.

CAFFERTY: No, I think there are a lot of Evangelicals in Iowa who may be concerned about the fact that Mitt Romney is a Mormon. I don't think Romney and Giuliani did themselves any favor in that last debate when they got into that dust-up. And I think Huckabee did well in that debate. He was funny, he was relaxed, he was lucid and he came across as a human being. And, so, you know, I think there are some reasons.

But it's still surprising. I mean he came from out of nowhere.

BLITZER: Gloria?

BORGER: Something else that's really interesting about Huckabee -- and John McCain said it me today. Huckabee is a populist, but his a has a positive message. A lot of people say John Edwards is the populist on the Democratic side, who's not doing as well as he would like to be doing. He's doing well in Iowa, but not elsewhere, because he's been a little angrier this time.

If you can combine that populism with a positive message -- even on the Republican side, which is not known for its populism -- it might -- it might really be a winner this time around.

However, count me as skeptical because I'm still not sure Huckabee can come up with the bucks to win.

BLITZER: All right, Gloria, thanks very much.

Carl Bernstein, once again, welcome to CNN.

You're going to be a regular here in THE SITUATION ROOM. His best-selling biography, of course, is entitled "A Woman In Charge," about Hillary Clinton.

You guys can go.

Jack, you can't go. We've The Cafferty File coming up.

BERNSTEIN: This will be fun.

BLITZER: Thanks very much.

And it could be a landmark speech for Mitt Romney. He's about to take the offense on an issue that's been dogging his campaign.

And Jack Cafferty's question this hour is, is it the government's job to limit junk food sales in schools?

Your e-mail and a lot more coming up here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs is getting ready for his show. That begins right at the top of the hour. He's going to tell us what he's working on -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

Coming up at 7:00 p.m. Eastern here on CNN, I have said from the outset that the prosecution of former Border Patrol Agents Ramos and Compean was an outrageous miscarriage of justice. It turns out now that the case against them is crumbling. An appellate court judge today saying it seems the government overreacted in its prosecution of the two former agents. We'll have that report. And two Congressmen -- leaders in the fight to free those agents -- will join me here tonight.

Also, Republican officials in New Mexico want to know whether illegal aliens with driver's licenses have fraudulently registered to vote -- a possible consequence of any state that gives driver's licenses to illegal aliens.

And Washington finally awakening to the financial crisis facing this nation's middle class.

Will government actually do something to help the people?

We'll have that report and a great deal more.

Please join us for all of that, all the day's news that top of the hour here on CNN -- Wolf, back to you.

BLITZER: All right.

Thanks very much, Lou.

See you in a few moments.

Let's check in with Jack Cafferty.

He's got The Cafferty File in New York -- Jack.

CAFFERTY: Well, the government -- there's a move in Congress to limit junk food sales in schools. It would be a federal set of regulations. And we asked if it's the government's job to do that.

Julian writes from Colorado: "No, it's not. This is insulting. Does the government really think schools and parents are so incompetent to not educate their children about the dangers of what they eat? Does it scare anyone else that the federal government feels free to legislate what we eat? This seems like a huge step over the line."

Anne-Sophie in Florida writes: "I think it's one of the best things to happen in a long time.

Have you looked at the kids in our schools? They eat junk food and they're fat. Even if they aren't fat, they're not healthy. As a high school student myself, I have been bringing my own lunch since I moved to the U.S. in 2000, because I can't bring myself to eat French fries and chips every day. The food in the school cafeterias is unhealthy and often inedible."

Now, that hasn't changed since I was in school.

Jared writes: "I honestly think the childhood obesity epidemic has gotten way out of control and I'm glad that Congress has finally decided to do something about the problem. This subject has been known for years now and only a handful of states have done anything about it. It's about time someone stands up to fix the obesity problem." Sheldon writes: "Undoubtedly, the government has a right -- even a duty -- to monitor the kind of foods kids eat, especially at a time when it's well recognized that the country has an obesity epidemic. To do nothing would be the worse folly of all. Do you want to pay for all the high blood pressure, diabetes and heart conditions brought about by the over indulgence and junk food? Well, you and I probably will."

And Carl in San Francisco: "It's not the government's job. They already have their noses in too much of our business. Parents need to take responsibility for raising their kids. Pop-Tarts for breakfast, junk food for lunch, pizza for dinner -- kids eat what they're fed."

If you didn't see your e-mail here, you can go to CNN.com/caffertyfile. We post more of them online, along with video clips of The Cafferty File -- Wolf.

BLITZER: Thanks, Jack, very much.

See you back here tomorrow.

Let's get now to a question of faith -- Mitt Romney's faith. The Republican presidential candidate is set to deliver a major speech on Thursday about his Mormon beliefs and how they would or would not affect his presidency.

Let's go to our chief national correspondent, John King -- John.

JOHN George H. Bush Presidential Library, CHIEF NATIONAL CORRESPONDENT: Wolf, for months, Governor Romney has tried to address questions about his faith in private, meeting with pastors and other Evangelical leaders during his trips to Iowa and South Carolina. Some in the campaign thought that was enough -- but not the governor, who decided late last week it was time for a major public speech about his faith. (BEGIN VIDEOTAPE)

George H. Bush Presidential Library (voice over): The goal is to address questions about his Mormon faith and to confront doubts that might not show up in the polls.

WHIT AYRES, REPUBLICAN POLLSTER: It's not always clear that people are telling you the truth. They may disguise a negative feeling with something else when it comes to a subject as touchy and sensitive as religion. So you really don't know. But this is probably a better safe than sorry strategy.

George H. Bush Presidential Library: Governor Romney's decision to deliver a major speech on his faith drew immediate comparisons to 1960 -- when John F. Kennedy confronted questions about Vatican influence on any Catholic president.

AYRES: Governor Romney can say, just as Jack Kennedy said in 1960, that he will neither request nor accept instruction from leaders of the Mormon Church on issues of public policy.

George H. Bush Presidential Library: There are 5.7 million Mormons in the United States. Senate Majority Leader Harry Reid most senior of 15 Mormons in Congress. Mormons consider themselves Christians. Easter and Christmas are their most important holidays. But the Church of Latter Day Saints is viewed suspiciously by some Christian leaders, in part because of secrecy. Mormon temples are off limits to non-members.

And, in part, because of beliefs. Church founder Joseph Smith believed the Garden of Eden was in what is now Missouri and that the second coming will be on the American continent.

Polygamy was outlawed by the Mormon Church in 1890, though some splinter groups still practice it.

A Pew Research Center study back in August found that half of Americans have little or no awareness of Mormon beliefs and practices.

AYRES: People are a bit suspicious of Mormonism, in part because they don't completely understand it. I think what Governor Romney needs to do is say that he's a member of a large mainline Christian denomination. If he does that, that will provide a measure of reassurance to some people who are suspicious about Mormonism.

(END VIDEOTAPE)

George H. Bush Presidential Library: The venue for the speech is the George H. Bush Presidential Library in College Station, Texas. The 41st president of the United States is not endorsing, but gave Romney an open invitation to return after a speech several months ago, and the campaign decided it was best not to deliver the speech in an early presidential battleground state -- Wolf.

BLITZER: All right, John, thank you.

John King reporting.

Let's check our Political Ticker today.

President Bush is accusing the Democratic run Congress of having little to show as 2007 comes to a close. The House and the Senate have a jam packed to do list over the next three weeks. Among the to do items, legislation on war funding and other spending. And wiretapping, as well.

Republican presidential candidate Ron Paul tells me just he's just begun to surprise a lot of people with his fundraising abilities. Paul says he's on track to raise more than $12 billion in the final quarter of this year. On CNN's "LATE EDITION" yesterday, Paul said he's already raised more than $10 million since October 1st.

For the latest political news at any time, you can check out our ticker at CNN.com/ticker.

He's been called the presidential candidate with the "Mayberry" name and the Jim Nabors face. But it's Mike Huckabee who could end up laughing all the way to the White House.

CNN's Jeanne Moos standing by with that.

That's coming up.

(COMMERCIAL BREAK)

BLITZER: The Republican presidential candidate with the unusual last name is surging ahead in some of the Iowa polls.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Just because we haven't found them, doesn't mean they didn't exist. We haven't found Jimmy Hoffa, either, but we know he exists.

MOOS: Or answering a YouTube question about space.

HUCKABEE: Maybe Hillary could be on the first rocket to Mars.

MOOS: It's easy to laugh at his name. A "New York Times" columnist wrote: "The first thing you notice about Mike Huckabee is that he has a Mayberry name and a Jim Nabors face."

The candidate sticks it to his own name with his bumper stickers -- "a.HUCK.i.be". Even his endorsements are funny.

(BEGIN VIDEO CLIP FROM MIKE HUCKABEE FOR PRESIDENT CAMPAIGN COMMERCIAL)

HUCKABEE: My plan to secure the border?

Two words -- Chuck Norris.

(END VIDEO CLIP)

MOOS: That's right -- Chuck the Huck.

(BEGIN VIDEO CLIP FROM MIKE HUCKABEE FOR PRESIDENT CAMPAIGN COMMERCIAL)

CHUCK NORRIS, ACTOR: Mike Huckabee wants to put the IRS out of business.

HUCKABEE: When Chuck Norris does a push up, he isn't lifting himself up, he's pushing the Earth down.

(END VIDEO CLIP)

MOOS (on camera): We're not just talking about a guy who's funny. We're talking about a guy who seems to be using his sense of humor as a campaign strategy.

(voice-over): Using it to deflect tough questions.

UNIDENTIFIED MALE: The death penalty -- what would Jesus do?

HUCKABEE: Jesus was too smart to ever run for public office, Anderson.

(LAUGHTER)

HUCKABEE: That's what Jesus would do.

MOOS: He never did say what Jesus would do about the death penalty Huckabee supports. He's a conservative, guitar playing, Baptist preacher. He's no Jimi Hendrix or even Bill Clinton on the sexy sax...

(MUSIC VIDEO)

MOOS: But Huckabee is someone average folks can relate to.

UNIDENTIFIED MALE: Huckabee is compassionate and lost a lot of weight.

MOOS: A hundred and ten pounds, to be exact.

He's got all those folksy sayings...

HUCKABEE: When they're kicking you in the rear, it's just proving you're still out front.

MOOS: Sayings that sometimes get him in trouble.

HUCKABEE: I'd have to be sitting in a warm tub of water with some razor blades in both hands at this point.

MOOS: The American Foundation for Suicide Prevention objected to that one.

On the Huffingtonpost's new humor Web page, we found a video with liberal closed captioning -- a subtext for the preacher's down home humor.

HUCKABEE: Whether we need to send somebody to Mars, I don't know. But I'll tell you what, if we do, I've got a few suggestions and maybe Hillary could be on the first flight to Mars.

(LAUGHTER)

MOOS: Even liberals are enraptured by his jokes.

(BEGIN VIDEO CLIP FROM MIKE HUCKABEE FOR PRESIDENT CAMPAIGN COMMERCIAL)

HUCKABEE: I'm Mike Huckabee and I've approved this message. So did Chuck.

(END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: Let's go to Lou Dobbs.

He's in New York -- Lou.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com